Dow Jones 30 Futures (CME: YM) shed 100 basis points in Tuesday’s session as the Banking Sector’s past fears came to haunt traders once again, giving favour to the Greenback as its safe-haven status had traders selling equities to buy the dollar.

With earnings season in full swing, the Dow Jones 30 Futures could take a swing at the upside, as some of the big names, including Microsoft (ISIN: US5949181045) and Google (ISIN: US02079K3059), reported positive earnings. Further driving sentiment this week will be the release of the key inflation reading, the PCE Index, along with the Labour Market Reports and Durable Goods Orders.

Technical

The Dow Jones 30 Futures has recently begun to reverse from the upside after a strong uptrend took it toward its year-to-date highs. Support and resistance were established at the 33495 and 34341 levels, respectively.

With price approaching support on declining volumes, a reversal is likely. If bulls outweigh bears, they could look to the 34341 level with interest if the price increases. Alternatively, a high volume breakdown below the 33495 level could indicate a growing bearish presence and prompt a move lower, leaving the current 100-day moving average likely.

Summary

Traders will watch earnings and economic events closely as they attempt to find traction in one direction. The Labour Market is forecast to slow even further, while inflation is projected to taper off year-on-year. If economic data comes in line with consensus, the Dow Jones 30 Futures could find less friction to the upside as the probability of rate hikes towards the end of the year subsides, lowering borrowing costs and valuation discount rates.

Sources: Reuters, TradingView